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As we suddenly find ourselves in the latter half of 2010, it is striking to me how quickly the cellular landscape is changing. Data-heavy consumer e-reader and tablet devices are selling like gangbusters, operators are reaching out to new consumers by making smart phones available under pre-paid plans, and carriers are giving the connected, non-phone device market much more lip service than ever before. This tells me that we could be heading toward a significant inflection point, where the disparity between the cellular bandwidth that is available and the volume that the market requires to successfully power this wave of new offerings will become painfully evident.
The shift to “connected devices”
We continue to hear more discourse from tier-one network operators about their service offerings in the machine-to-machine space. Candidly, this should come as no surprise. M2M devices are positioned to boost personal convenience, safety and health by orders of magnitude.
For example, this publication points out that “always on” wireless devices could have played a role in preventing the oil spill disaster in the Gulf of Mexico this past summer, and most certainly could help avoid a repeat in the future. Wirelessly connected sensors provide real-time monitoring of a number of variables such as pressure, flow and seismic activity, acting as the proverbial “canary in the coal mine” in case of exception-based events.
One of the more newsworthy environments for connected devices is the smart grid. Smart meters, and even appliances themselves, that connect back to the utility via cellular M2M are designed to give consumers a real-time picture of their electricity consumption. Eventually this will allow homeowners to receive incentives for following usage patterns that encourage conservation. According to forecasts from researcher Parks Associates, about 43% of U.S. homes will have these new meters installed by 2014.
On the convenience front, a number of cities already feature parking meters that accept credit cards; other point-of-sale devices that formerly accepted only loose change such as self-serve car washes or tire-air stations are also making this transition.
What about the restaurant delivery person, or the plumber on an emergency visit? M2M devices are enabling them to accept on-site card payment via secure terminals as well. And consider this market-driven example of the application of M2M-connected devices: a vending machine that dynamically adjusts the price of a can of soda in response to supply and demand. On a hot day, when the supply in a particular vending machine runs low because of high foot traffic, you may have to pay more for a drink.
I have not even addressed traditional growth areas like premises security and the continually evolving asset tracking market. The horizon for M2M enabled applications becomes virtually limitless.
m-health rising
With the Obama administration having committed $10 billion per year for the next five years to transitioning the U.S. health care system to standards-based electronic information, including a specific line-item for telemedicine infrastructure expansion, perhaps the largest leap in the near term will come with the growth of healthcare and medical device connections. The numbers tell the story: In our business, in 2008, only 1% of net new M2M device additions were related to wellness management and healthcare, while in 2009, new activations for healthcare surpassed 20% of total added connections. I anticipate this steep adoption curve to continue because of the cost savings and convenience offered by tele-health.
Wireless medical devices are being rapidly adopted to enable remote monitoring of several chronic conditions including sleep apnea, heart disease, diabetes and Alzheimer’s Disease. Portable devices can transmit real-time information conveniently, reliably and inexpensively, allowing hundreds of thousands of patients to lead more active lives while significantly reducing health care costs.
The largest areas of adoption for these devices will likely be by caregivers (both professional and extended families) to improve wellness management of patients and loved ones. In fact, caregivers are two to three times more likely to invest in proactive health monitoring than the patients themselves.
The Internet-of-things: A cellular opportunity
I am constantly impressed at the rate at which M2M devices are being invented and adapted to fit very specific application needs. Just a few examples include hermetically sealed personal trackers, taxi payment terminals, wind monitoring devices and package tracking scanners – each designed with the particular form factor, packaging, power management and environmental controls required for the job.
Through the proliferation of custom designed M2M devices, a combination of cellular connectivity and near-field technology such as RFID tagging is primed to play a sizable role in the so-called Internet-of-things, to allow objects of all shapes and sizes to communicate with one another via Internet Protocol. Food will talk to store shelves, power lines will talk to the utility grid, cars will talk to mechanics, road sensors will talk to highway departments, and they will all do it via digital wireless connections.
Making ends meet
If mobile data continues to grow at its current pace, and if the expected volume of devices and objects comes onto the network even at a modest rate, we will start to run up against limitations in the network’s capacity to serve all these applications. I believe that many cellular operators will need to become smarter about how they deliver data and content. But there’s some good news in this regard: Most of the unmanned, connected applications are not rigid about when they need to use the network. This opens up an intriguing new market opportunity that can simultaneously conserve bandwidth resources and improve the business model for operators.
To encourage content delivery at times when the network is less congested, we can take a cue from the overnight courier industry. Like FedEx or UPS, operators could charge a premium for instant data services, while those that can wait to transmit during off-peak hours will get an “economy” rate. For example, there’s nothing that says an e-book must be delivered at the time of order. It can come with the promise that it will transmit by a certain future time. But if a subscriber wants it now, then he or she pays a premium.
There are no be-all-end-all answers here, but the cellular industry needs to develop a framework for this discussion. With every great challenge comes great opportunity and I look forward to participating in a lively debate and contributing ideas to help our ever-more connected planet evolve.
Alex Brisbourne has been president and COO of KORE Telematics since its inception in 2003 and has more than 20 years of experience in the wireless, enterprise and fixed-line networking and telecom industries. In his current role, he brings a uniquely qualified perspective from the front lines of applied machine-to-machine communications and embedded wireless. He speaks regularly at business and technology conferences and is frequently called on as an expert source for trade and business-related articles. He sits on the Advisory Board of a number o
f technology companies in the United States and
Canada.
